It would do wonders for the deficit, reducing it by at least $500 billion in the first year alone. Yes, we'd probably be back in a recession, with a 9.1 percent unemployment rate, but it would be mild, temporary, and we'd be back on our feet in no time, says the nonpartisan Congressional Budget Office.

Eliminating the Bush-era tax cuts, including those on the middle class, and proceeding with the automatic reductions in spending would reduce the gross domestic product by a mere 0.5 percent in the early part of 2013, combined with "renewed growth at a modest pace later in the year," the CBO stated in a report released last week. By 2014 "the labor market will strengthen, returning output to its potential level and shrinking the unemployment rate to 5.5 percent by 2018," it added.

At the same time, "there would be a sharp reduction in the budget deficit - in decline in debt-to-GDP (and) falling deficits as a share of GDP," said Chad Stone, chief economist at the Center for Budget and Policy Priorities. "It's all a dream for people who want really sharp austerity."

In healthier economic times, that mixture of spending cuts and tax increases might have been just the ticket to take on a debt that Secretary of State Hillary Rodham Clintonsaid "poses a national security threat." But then, these aren't the healthiest of times, and huge, premature spending cuts could be a particularly bad move, as much of Europe has discovered.

"It all comes down to the proper balance between shorter-term economic growth and being a deficit hawk," said Tammy Frisby, a research fellow at the Hoover Institution and an adviser to former presidential candidate Mitt Romney. "Even economists on the right have shifted more to the economic growth position."

Danger of keeping cuts

On the other hand, preserving the Bush-era tax cuts for the wealthy - essential, some say, to keep the motor running - is more difficult to defend.

First off, the amount of government revenue generated by ending them - $42 billion in 2013 - will have virtually zero impact on economic growth, according to the CBO. Keeping them would add an estimated 200,000 jobs over a 12-month period, compared with 1.6 million jobs if tax cuts for all but the wealthy were extended, the CBO says.

More tellingly, a series of government and independent studies cast doubt on the correlation between upper-income tax breaks and economic growth.

While tax rates on the wealthy have decreased steadily since the 1940s (the top marginal tax rate was 91 percent during the Eisenhower years), "there is not conclusive evidence to substantiate a clear relationship between the 65-year steady reduction in the top tax rates and economic growth," according to an analysis published by the Congressional Research Service in September (and later withdrawn after protests from Republican lawmakers).

"Analysis of such data suggests the reduction in the top tax rates have had little association with saving, investment, or productivity growth," the report noted. "However, the top tax rate reductions appear to be associated with the increasing concentration of income at the top of the income distribution."

Such concentration may in fact inhibit growth, other studies suggest. "Longer growth spells are robustly associated with more equality in the income distribution," according to an International Monetary Fundstudy last year.

In his fiscal cliff statement Friday, President Obama once more insisted that "people like me" - those making more than $250,000 a year - pay more in taxes as part of any deficit deal.

Wealthier to pay more

One or way or another, it seems, the wealthier among us will be paying more in federal taxes than they have since the Clinton years. Less clear is who, when and how.

According to the Associated Press, Sen. Chuck Schumer, D-N.Y., on Thursday "hinted Democrats might show some flexibility on demands to increase the top income tax rate from 35 percent to 39.6 percent for upper-income earners."

Schumer is a senator from a high-wage, high-cost blue state, which, like California, has a great many Democratic constituents who earn more than $250,000 a year but do not necessarily identify themselves with Warren Buffettor Bill Gates,who support higher taxes on the wealthy.

"Right now the Democrats are being good soldiers, but once we get through the fiscal cliff, I suspect we'll move away from the $250,000," said Frisby, who also teaches political science and public policy at Stanford University.

Others have suggested the higher rates be applied to those making more than $500,000 a year, or $1 million. Or, as House Speaker John Boehner, R-Ohio, seems to have suggested, that limiting other tax breaks and yet-to-be named loopholes benefiting the wealthy could accomplish the desired result - or a combination of the above.